‘America To Continue To Benefit From Competition Between Post And TreeHouse’
Consumer packaged goods holding company Post Holdings said it terminated the agreement to acquire TreeHouse Foods, Inc.’s ready-to-eat or RTE cereal business.
The company’s decision comes after the Federal Trade Commission or FTC filed a complaint against the proposed deal in December 2019, alleging that the deal will harm competition.
According to the FTC, the acquisition would give Post more than a 60 percent share of an already highly concentrated market and eliminate the “vigorous competition” between Post and TreeHouse to serve retailers across the country.
Separately, TreeHouse Foods said it mutually agreed with Post to terminate the deal and will now begin the process of re-marketing the business for sale. The company is in the midst of a reorganization process.
In May 2019, TreeHouse Foods said it agreed to sell its RTE cereal business to Post Holdings for undisclosed terms. The transaction was expected to close in the third quarter of 2019.
TreeHouse acquired the business from ConAgra Brands as part of the Private Brands transaction in 2016. The business operates two manufacturing plants in Lancaster, Ohio and Sparks, Nevada.
However, the FTC voted unanimously in December 2019 to file a complaint against the transaction. The consumer watchdog sought a temporary restraining order as well as preliminary injunction in federal court to stop the proposed deal.
On Monday, the FTC welcomed the companies’decision to terminate the deal.
“Households across America have benefited from robust competition between Post and TreeHouse, and they will continue to do so now that this merger has been abandoned,” said Ian Conner, Director of the FTC Bureau of Competition.
Separately, TreeHouse said it has agreed to sell two of its in-store bakery facilities to Rich Products Corp., a family-owned food company with more than 11,000 associates. Financial terms of the deal were not disclosed.
The two bakery facilities, located in Fridley, Minnesotta, and Lodi, California, manufacture breads, rolls and cakes for in-store retail bakeries and food-service customers. TreeHouse expects the transaction to close by April 10.
TreeHouse had acquired the in-store bakery business also from ConAgra Brands as part of the Private Brands transaction in 2016.
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